The minister shared data in a written reply to a question by Rajya Sabha MP Jaya Bachchan on import of telecom equipment which showed that the figure has increased by about Rs 12,577 crore from Rs 61,539.01 crore in 2012-13. In 2011-12, telecom equipment import in the country was Rs 59,447.4 crore. Prasad said the government has imposed basic customs duty at 10 per cent on specified telecom products that are outside the purview of the Information Technology Agreement.

India is a signatory of ITA 1 as a member of World Trade Organisation. Under the pact, member countries should allow duty free import of products falling under eight categories covering telecom, computers and semiconductors like mobile phones and electronic chips. While ITA allowed import of finished product duty free, domestic manufacturers paid taxes on importing components used for making a complete unit which made indigenous production of electronic products expensive hitting the hardware production in India. Prasad said: “The government also imposed education cess on imported electronic products to provide parity between domestically produced goods and imported goods.”

He said the government has also declared set top boxes a part of telecom network which is likely to reduce their prices. It would result in 2 percent central sales taxes on inter-state sales and make them more competitive compared to imports. The minister mentioned that the proposal to include STBs in definition of goods for use in telecom network is under consideration of Department of Revenue. In first and second phase of cable digitisation, imported STB accounted for about 95 per cent market share. Prasad said the government has notified 23 categories of telecom products produced domestically for giving preference in government procurement.

He cited that two government schemes — Electronics Manufacturing Clusters and Modified Special Incentive Package Schemes (M-SIPS) are in place to encourage domestic manufacturing. ”EMC scheme provides financial assistance for creating world class infrastructure for electronics manufacturing units and M-SIPS provides financial incentives to offset disability and attract investments in the manufacturing of electronics products,” Prasad said.